Current supply chain situation in China

The updated COVID policies in China in early December and the related spread of the infection since has been well covered in media. In the period since we have noted very high infection rates in many areas of China, including the Shenzhen region. This has impacted factories to a degree at the same time as China was preparing for the closures during Chinese New Year.

What is the operational status of our factories?

During the December and January time period, we have seen across our factories an infection rate of 75% to 95%. The vast majority of employees have recovered and we are now seeing attendance levels of 95% on average, noting that in some instances we see lower and in others we have full staffing levels.

During this period where we observed employee shortages as they guaranteed, this has caused some disturbances to response time and some internal delays within the production processes, yet this has been quickly rectified as employees returned to work.

This means that as we move towards Chinese New Year shut downs we have been able to work in the planned proactive ways as previously communicated.

What actions are NCAB taking?

Early in December we anticipated that the new COVID regulations in China could lead to challenges and disturbances in production and supply. With that in mind we took action to pull in orders and firm up control of the supply chain, which has helped us manage the recent weeks without significant impact on our delivery performance.

We are preparing further action plans together with our factories to find different ways of working around any potential disruptions. Our Factory Management team in China remain in close contact with our factories both on operational and management level, negotiating and booking capacity to gain production priority – some of these activities are explained below:

  • Establishing contingency plans with each factory.
  • Closely monitoring infection rates and establishing crucial levels that would necessitate implementation of contingency plans in order to secure production and bolster staffing levels.
  • Understand what temporary travel restrictions are put in place to secure the workforce and limit risk of infection.
  • Reviewing order books and prioritizing critical projects.
  • Cooperating with our local companies to pull forward orders to secure the order book both pre and post CNY.
  • Identify optional back up factories in the case of capacity issues or production stops. 
  • NCAB has also defined back up factories that can be used should capacity of production concerns be experienced, thus ensuring seamless support customers with approved sources.  
  • We also have a fully approved supply chain in Taiwan that is capable of supporting all technologies and volumes, all managed by a well-established, local Factory Management team.
  • NCAB Factory Management meeting with senior management / owners within the factories to ensure continued support and prioritization.
  • Weekly delivery performance follow up at factories to evaluate performance.

Who do I contact to get more information about my deliveries?

If you have any questions or concerns, please contact your local contact person at NCAB.